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Kathy Herrmann
Consultant - Business Strategy & Design
Posted on Nov. 2, 2011

Research shows agent productivity increases with access to content in the community postings. The reason is the content developed for the knowledge management database is often based on “known” problems or customer issues and their “known” solutions.

Many customer service technology solution solutions have the ability to pull content from community conversations to accelerate the creation of new knowledge base articles. Technical capabilities like this further increase agent productivity by lessening the time required to create new articles.

Knowledge Base Operational Savings:
# Cases Impacted = (# Cases per period) x (% Cases Impacted)

Savings per period =
AHT (% Decrease in AHT) x (Agent Cost per hour) x (# Cases Impacted)

Note: AHT = Average Handling Time

The question is how Dr. Natalie and I determine "% of Cases Impacted." We look for correlations between knowledge base article creation, call volumes, and Average Handling Time. We also cross-check against volumes of social conversations.

This is where the "art of ROI" comes into play because there isn't an absolute answer. It comes back to "defendable assumptions" based on the data correlations.

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Andrei Kamarouski
Andrei Kamarouski Replied on Nov. 4, 2011

Kathy,
You've written "lessening the time required to create new articles".
But were is this time for articles creating in formula above?
Didn't you consider this "micro-costs" by analyzing KnBase ROI?

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Andrei Kamarouski
Andrei Kamarouski Replied on Nov. 4, 2011

And what is the difference between cases need assictance and impacted cases?
Thx!

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Kathy Herrmann
Kathy Herrmann Replied on Nov. 4, 2011

Hi Andrei,

Here are answers to your questions.

*** COST TO GEN KB ARTICLES***

The formulas you see above focus just on the savings gain.

However, you're right, you do want to account for the time needed to create the cases as part of the cost of the activity.

Our typical approach is to capture the time as a People Cost. Here's the formula for People costs:

Burdened Compensation per Social Team Member =
(Salary + bonus + benefits load) x (%Time Devoted to Social)

Total People Cost = Sum of all individual costs.

You could get super anal and break out the cost solely for KB generation. Most of our clients don't require that level of granularity so we lump the People Costs.

Many of our clients have tech solutions that allow them to fully or partially automate article creation (by "sucking" in content via connectivity between their CRM and online community).

The tech costs for social are one of the cost categories we consider in the ROI.

This slidedeck shows a summary of both People and Tech Costs: http://www.slideshare.net/kathyherrmann/focus-social-customer-service-roi

Go to slide 12 to begin the Cost section.

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Kathy Herrmann
Kathy Herrmann Replied on Nov. 4, 2011

And for...

*** IMPACTED CASES ***

"Cases needing assistance" are those that still require a customer to call or email in.

"Impacted Cases" are those that are deflected by KB articles. This is a projected variable we determine by looking at changes in call center stats compared to changes in the volume of in KB articles as they're generated.

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Andrei Kamarouski
Andrei Kamarouski Replied on Nov. 4, 2011

Kathy, thx!
And to explaine one more detail.
In your presentations befor this serie you have indirect deflection. Are IMPACTED CASES the same thing? From definition above it seems to be so: deflected without assistance (as ready answers to client questions etc).

Sometimes it seems to have risk of double-counting.

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Kathy Herrmann
Kathy Herrmann Replied on Nov. 4, 2011

Andrei,

Dr. Natalie and I consider both Direct and Indirect Deflection. Not sure if you heard our Social Customer Service ROI roundtable, so let me give a few definitions for clarity.

Direct deflections occur when a customer who would normally call or email a contact center for assisted support instead posts a question (in a new conversation) in a social channel and gets an answer directly from within the social channel.

Indirect deflections occur when lurkers search within a community and find the answers to their questions by reading what other people have posted.

If you missed the roundtable on Social Customer Service ROI and want to catch up....

http://www.focus.com/roundtables/simplifying-social-business-how-calculate-so...

As for your question of double dipping, the answer is it depends on a company's social program. In some cases, it could be double dipping and in others, it's not. That's a call Dr. Natalie and I make when we structure our ROI analysis with client input.

Let me give you an example where it's NOT double dipping.

Consider a company that has a Facebook community - and the commmunity has active problem-solving discussions among customers. The FB community then becomes a source of both direct and indirect deflection.

Now, imagine the company also has a separate support community -- and it includes a growing KB, helped at least in part automated content generation sourced by content from the FB community.

Customers who find in the KB become a source of indirect deflection.

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Andrei Kamarouski
Andrei Kamarouski Replied on Nov. 4, 2011

Kathy,
I am very happy to recieve your so detailed answer.
Now I understand the point. And my question about impacted cases comes after your roundtable.
In my case I have community platform, that works as public and internal KB simultaneously, and FB + TW + blogs..
And at first time it is complex and sometimes unclear process to develop custom social customer ROI solution without double dipping.
I hope to have concret question when I come little further by solution developing )

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Kathy Herrmann
Kathy Herrmann Replied on Nov. 4, 2011

Glad to help. If we can assist you, give us a shout. I'm at....info AT kathyherrmann DOT com.

My phone # is also listed on my website at www.kathyherrmann.com

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Andrei Kamarouski
Andrei Kamarouski Replied on Nov. 4, 2011

Ok.
Really you give very detailed and exampled information so learning process goes very effective. As for me.
It will be great to have your assistance. But is to costly for us (
I hope send you my excell example as it become prefinal readness and recieve short examinating ).

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